Cross Border Acquisition

March 27, 2023

by a searcher in Toronto, ON, Canada

What unique challenges do you face when exploring a potential acquisition in another country? I am a Canadian interested in an acquisition in the US, and would love to chat with someone who has been through or is knowledgeable in this experience.

In particular, what loan options are available and should you work with a lender in your home country, or the target acquisitions country? And what are the visa/citizenship requirements? etc.

Thanks!

Noah

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Reply by a professional
from Villanova University in West Chester, PA, USA

Hi ^redacted‌! I'd be happy to chat about this. I've represented a number of investors in Canada with respect to their investments in the U.S. There are a number of considerations for cross-boarder transactions - much of the same things we work with for U.S. investors, but through a different lens with different considerations. The two main considerations are: (1) Entity type and corporate structure and repatriation of funds - we work with your accountant to select the best entity type for your present and future goals and the planned repatriation of funds; and (2) transaction structure - we work with your accountant to select the best acquisition structure for your present and future goals and the planned repatriation of funds. There are some limitations with financing, notably SBA financing may not be available depending on the ownership structure - at least 51% ownership must be by a U.S. citizen or greencard holder. Otherwise, there aren't much visa/citizenship requirements. I'd be happy to discuss this further.

Reply by a searcher
from University of Georgia in Greenville, SC, USA

I'm working on the acquisition of a UK company by my US company. Big things I'm dealing with are finding lending options that go cross border, taxation issues on both sides (pre and post sale), data privacy compliancy specific to each country, currency exchange rates fluctuating, P&L and bank statements in different currencies, and legal issues on both sides. I've had to have different representation on the UK and US side of things for everything from legal to accounting to specialty advisors. If it's your first acquisition, I would probably recommend looking in your own country for simplicity sake, unless it's a perfect company for you.

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